Tax Return Preparation: Tax Services, Tax Help and More

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Tax filing options began to boom with the passage of the federal Revenue Act in 1978. Section 163 of the Act allows the Internal Revenue Service to enter into partnerships or “cooperative agreements” with various programs and providers to assist taxpayers with the onerous challenge of preparing and submitting their returns.

The free options aren’t available to everyone, but your choices are pretty much limitless if you don’t mind coming out of pocket to have someone else do your taxes for you.

Getting Started

You might need a checklist of documentation to gather up and hand over to a professional, even if you already have a good handle on all the options that are available to you. At a minimum, make sure you have the following:

  • Copies of your filed tax returns for the last two to three years
  • Social Security or tax ID numbers for yourself, as well as your spouse and your dependents, if applicable
  • Dates of birth for your dependents, if any
  • Childcare records for potentially claiming the Child and Dependent Care Tax Credit
  • Income records for any adult dependents you think you might be eligible to claim
  • Records and receipts for any itemized or above-the-line deductions you might potentially claim, including medical expenses, charitable contributions, state and local taxes paid, retirement plan contributions, education expenses, and educator expenses
  • Health insurance coverage records and receipts 
  • Business expenses if you’re self-employed – a comprehensive list should suffice for your tax professional, but be sure to maintain your receipts in case of an audit
  • A record of any estimated taxes you’ve paid to the IRS during the tax year

Your mailbox has probably been peppered with various tax forms as well since the beginning of the year. Keep an eye out for these tax forms, and turn them over to your tax preparer as well:

  • Form 8332: Relinquishes the right of the custodial parent to claim the child, granting it to the other parent
  • Forms W-2: Your employer or employers will probably give you these. They provide a breakdown of your earnings and what taxes were withheld from your pay over the course of the year. 
  • Forms 1099: Numerous types of 1099s detail income you might have received other than for traditional employment. This income must be claimed on your return. 

These lists aren’t exhaustive. You might additionally need some paperwork for more rare financial circumstances, but a tax professional can point you in the right direction to find it if necessary.

When Do You Need Professional Help?

First ask yourself if you’d just rather swallow poison than deal with your taxes, or if you have a genuine concern that might benefit from professional help. Either way, you have options. Check out your local tax practitioners. The vast majority offer free consultations and can tell you if you’re probably better off hiring a professional to help you.

And if you need help finding a tax professional? Use the search tool offered on the IRS website to find out who’s available in your area. You can also use the tool to check the credentials of an individual you’re considering hiring.

Otherwise, IRS-certified volunteers stand by ready to help if you’re only suffering from tax phobia. They're available through numerous programs around the country. You can prepare your federal tax return yourself at many of these locations using free web-based software, then just wave your hand for assistance if you encounter a problem. Look for the words “self-prep” in the online listings if this option appeals to you.

IRS Free File

One of the most well-known free services is IRS Free File. It’s a partnership between the IRS and leading tax software providers. You’ll have access to tax preparation software for free if you earn less than $66,000 a year as of the 2019 tax year.

You can access Free File on the IRS website. Just answer a few questions to find out if you qualify. Or you can go directly to your preferred software provider to find out through them if you’re eligible.

A word of warning, however: You probably won’t be eligible for free services if you were self-employed at any point during the tax year and you file a Schedule C, or if your tax situation involves any other complex wrinkles. You can still use the software, but you’ll have to pay for it. It’s still cheaper than hiring a real live tax professional, however.

Volunteer Income Tax Assistance

Volunteer Income Tax Assistance is operated under a federal grant program, and it’s free if you earn $54,000 a year or less as of the 2019 tax year. You’ll also qualify for free help if you’re disabled or you have trouble communicating in English.

An IRS-certified volunteer will help you prepare your federal tax return and, in some cases, will even e-file it for you. Call 800-906-9887 to find out if there’s a location near you.

Tax Counseling for the Elderly

This program is free for everyone, but it specializes in tax issues most commonly encountered by retired taxpayers age 60 or older. Tax Counseling for the Elderly is also manned by IRS-certified volunteers and it’s run by various organizations through grant agreements with the IRS.

TCE gives advice and guidance – it’s free tax “help” and “assistance,” not necessarily free tax preparation or filing. These centers are typically open from Jan. 1 through April 15 each year. Find locations by calling 888-227-7669.

AARP Tax-Aide

AARP operates a good many of the TCA locations, but it also offers the Tax-Aide program. Tax-Aide has been around since 1968, and it does prepare tax returns for free. These IRS-certified volunteers also specialize in help for older Americans, those age 50 or older, but assistance is free for younger taxpayers as well.

You’ll find Tax-Aide locations tucked into local libraries, community centers, senior citizen centers and even malls. According to AARP, there are more than 5,000 of them countrywide. You don’t have to be a member of AARP to qualify for help.

IRS Taxpayer Assistance Centers

Certain IRS offices provide Taxpayer Assistance Centers. They won’t actually prepare your return, but they can help you do so. The IRS offers a search link on its website to tell you where you can find the nearest TAC location – just enter your ZIP code.

You can’t just drop by and ask for help, however. The IRS requires that you first make an appointment, and you must provide certain personal information, including your Social Security number and current photo ID, at the time of your appointment.

About Those Neighborhood Tax Services

OK, so you don’t qualify for any of these free services, or you otherwise need a tax preparer to help you. That “chain” service in the strip mall down the street might suit you just fine if your tax situation is pretty simple but you just don’t feel capable of tackling it yourself.

These services run the gamut when it comes to education and cost. You won’t necessarily be dealing with an accountant unless you specifically make that request, but employees have passed at least 60 hours of training, which might be all you need for a basic tax return claiming the standard deduction. This is usually the least expensive “real live help” option.

Enrolled Agent Qualifications

Then there are enrolled agents, or EAs. These folks have either worked for the IRS or they’ve passed a three-part exam offered by the IRS to achieve certification. They have to take 72 hours of continuing education courses each year.

An EA might be appropriate for somewhat complex tax situations, such as if you want to itemize your deductions or you own income-producing investments. They tend to charge a little less than certified public accountants.

What Exactly Is a CPA?

A certified public accountant, or CPA, is the next step up the tax preparation food chain. CPAs have degrees in accounting. They must have a five-year business degree, two years’ experience and they must pass the CPA exam for certification. They must take at least a cumulative 120 hours of continuing education classes every three years.

But not all accountants handle taxes. In fact, most don’t. Ask about the practitioner’s specialty before you make an appointment. These tax professionals might be a good choice if you have a very complex tax situation, or if you need tax advice because planning for the future is just as important to you as tax return preparation.

Do You Need a Tax Attorney?

With any luck, you’ll never need a tax attorney, a lawyer who specializes in tax law. These professionals have invested at least seven years of their lives into education, including law school. They’ve passed the bar exam in your state. Some have an additional degree called a Master of Law in Taxation, the highest a tax professional can achieve.

This is who you’ll want on your side if you’re being audited for a prior year, or if the IRS is reaching out to you with questions you’re not sure how to answer about this year’s return and you have a lot to lose if the proceedings go south.

The Taxpayer Advocate Service

The Taxpayer Advocate Service might be able to help you for free if you have a problem with the IRS and can’t afford an attorney to sort it out. It’s technically part of the IRS, but it’s an independent organization within the agency. They’ll make sure you’re being treated fairly under the terms of the Taxpayer Bill of Rights, and they’ll even help you with a little tax planning to avoid problems in the future.

You must submit an application to TAS requesting assistance. Someone will get back to you and set you up with an appointment if your problem is anything they can help you with, which usually means that an IRS action is causing you financial difficulty. Who knows – you might even end up getting a tax refund.

TAS has offices in every state and can be reached at 877-777-4778.

References

About the Author

Beverly Bird has been writing professionally for over 30 years. She is also a paralegal, specializing in areas of personal finance, bankruptcy and estate law. She writes as the tax expert for The Balance.